Monday, June 15, 2009

Showcasing Marketing ROI

One of my favorite non profit marketing bloggers, Nancy E. Schwartz, was recently asked a question on her blog from a reader who wanted some professional help in creating a strategy for her declining organization. Like Nancy, I’ve been asked the same question myself many times and I was interested to see how she would answer.

Her 6 Steps to Showcasing Marketing ROI are below:

  1. Stop asking marketing firms to call your decision makers and stop passing on firm materials as well.
  2. Build understanding of what marketing is and the value that it will bring to the Council — and, most importantly, what the Council will lose if it continues without strategic marketing.
  3. Come to the table with a succinct plan including a budget.
  4. As you implement your initial marketing project, keep management and board posted on progress.
  5. Serve as an ongoing marketing mentor to your management and board.
  6. Once you have one or two successful marketing projects under your belt, then it’s time to develop a comprehensive marketing plan, derived from the Council’s goals.

Nancy is spot on and I suggest you read her entire column. However, I think there is a critical element that needs more emphasis. The biggest problem marketers face today from the Board or C-level suite is not a lack of funding or support but rather their own inability to connect marketing to the strategy of the business and demonstrate top- and bottom-line impact. In other words, marketers continue to run programs, campaigns, and tactics that spend money and create a flurry of activity, but those efforts are not linked to the things that are important to the CEO, Executive Director, or even the Board.

I’ve been marketing for more than 20 years and I’ve never run into a CEO that turned down a good investment in growing the business. But I consistently see CEOs turn down marketing plans that fail to demonstrate ROI. And the ROI I am talking about is NOT on how many calls were generated, or how many column inches were earned in the media, or even how many brochures were mailed out. Those are all activities and related to expenses. They’re not results. What the executive leadership wants to know is did you move the needle on the dial that is important to them. Those dials could include:

  • New member acquisition
  • Member retention/churn
  • Brand loyalty as an indicator of referrals
  • Income generated from fundraising
  • Number of new donors
  • Number of recurring donors
  • % of fundraising to donor base and change from effort
  • Share of wallet for donors

And we marketers must be better at financially analyzing the impact of our marketing efforts. It isn’t that we run a marketing campaign and say we spent $5,000 and generated 108 new enrollments. We need to know what the cost per new enrollment is, how one campaign performs against others, and what campaigns are more profitable and contribute to the margin.

Good for Nancy for identifying her top six steps. Good for her reader for asking what she could do better. And good for you if you begin to think in terms of investments from the perspective of the C-level suite.

But, what else would you add to the list of six from Nancy? Would you have a different list? And what is keeping you, or marketing, from getting the support from your executives?

-- David Kinard, PCM

[photo: Gavoon Products]

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